Accounting Decisions and Corporate Governance

In corporate Europe, the economic crisis during the past years has increased the demand for high-quality governance mechanisms including the financial reporting, management control, auditing and executive compensation of the firm. While decades of research has explored economy, industry, and firm-level determinants of corporate decisions and performance, surprisingly little is known on how accounting decisions vary across executives, directors, auditors and other individuals within the firm. The broad scientific goal of the research community is to explore how governance mechanisms can be designed in a sustainable manner to meet the challenges of the current business environment. Moreover, the community addresses this question in the context of public organizations. The three research groups in the RC explore corporate governance both from financial and management accounting’s point of view, thereby taking different angles to the question of how to develop effective corporate governance mechanisms in private and public organizations.

Financial Reporting and Corporate Governance & Executive Compensation and Corporate Governance

These research groups explore how personal attributes and traits of top executives, auditors and other corporate insiders affect the accounting and financial decisions of the firm. In particular, these two RGs use corporate insiders’ psychometric indicators, IQ scores, criminal convictions, payment defaults, wealth distribution and other similar person-level data to measure their cognitive abilities, ethical awareness and risk-perceptions. These personal characteristics are linked to the financial reporting choices, tax avoidance, executive compensation, auditing and insider trading of the firm to bring accounting research down to the level of individual decision-makers. To illustrate, the group seeks to find answers to research questions like:  Do listed firms having criminally convicted directors and top executives report low quality earnings due to extensive accounting manipulation? Do CEOs with low ethical awareness aggressively manipulate earnings in financial reports to avoid taxes? How do managerial characteristics such as unethical behavior affect executive compensation policies chosen by the firm? How do executives’ individual risk-taking behaviour and preferences affect their decision-making?

For further information on Financial Reporting and Corporate Governance, please contact Prof. Juha-Pekka Kallunki, juha-pekka.kallunki (at)

For further information on Executive Compensation and Corporate Governance, please contact Prof. Petri Sahlström, petri.sahlstrom (at)

Management Accounting and Corporate Governance

Research group examines corporate governance from management accounting angle including areas such as the use of external environmental reporting information on firm decision making, the impact of cost management techniques on public sector governance, the transfer of management accounting from the private sector to the public sector, and the relationship between steering systems/IT infrastructure and management accounting. Important questions related to these topics include: How to implement decision-supporting accounting systems in organizations that have a history of not regarding efficiency as their primary goal? How do systems that promote financially oriented governance models interact with other governance models such as collegial professionalism, bureaucratic mechanisms or even political leadership?

For further information on Management Accounting and Corporate Governance, please contact Prof. Janne Järvinen, janne.jarvinen (at)

Last updated: 1.4.2019